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Platform strategies: New rules for the ecosystem era

Digital disruption is leading to platform-based ecosystems that are driven by customer demand—and many insurers are not ready.

All industries are exposed to disruption, and established companies, like insurance carriers, are among the most vulnerable. Those businesses that are well prepared for disruption are building their growth strategy on platforms.

These platforms are reshaping industries into interconnected ecosystems that bend the traditional rules of competitiveness. Players across industry clusters are entering existing platforms as enablers or are collaborating to build new products, services and customer experiences. Or businesses are expanding into other industries by using existing platforms—or creating their own.

Insurance is starting to seize upon the trend. Eighty-three percent of insurers surveyed for Accenture Technology Vision 2016 expected platform-based business models to become part of their growth strategy in three years, while 81 percent of insurers agreed that platforms will be the glue that binds organizations together in the digital economy.

Successful collaborations are forming every day between insurers and members of their extended value chain. Home insurers are forging close relationships with manufacturers of connected home technology and auto insurers are positioning themselves in automakers’ ecosystems; health insurers are working with the makers of fitness trackers and apps to create new products.

One example of the trend in motion is a global strategic partnership between AXA, Alibaba and Ant Financial Services. They have agreed to jointly explore opportunities to distribute AXA’s insurance products and services through Alibaba’s global ecommerce ecosystem. For example, AXA will provide tailored insurance products for retail and commercial customers on Alibaba’s marketplaces.

As this example shows, new origins of value are emerging for insurers and their customers in the digital era. No longer should carriers position themselves in a discrete segment of the value chain. As industry lines blur, they can partner with other companies to share risk and share resources to create joint mutual value. Here are some lessons from the platform leaders about how to turn collaborative situations competitive.

Re-assess your customer needs
What do your customers need in the age of digital disruption—and how can you adapt to deliver it? Some insurers should look at customer needs through a different lens. Identify customers’ known and unknown needs, and address them in the most productive way possible.

Make yourself indispensable
Become a critical part of the integrated solutions that customers demand, and shape it productively. Determine where you will position yourself in the value chain: as the inventor, the designer, the producer or the assembler? What will be your sustainable, competitive position in the digital ecosystem? Is it a vertical or horizontal offering, customer-facing or enabling?

Question your value proposition
Moving from observing to acting needs to be a key priority for industry leaders, because if you don’t offer it, your competitors will. Decide whether you are going to be a platform; a platform across platforms; or a developer of apps and services on other people’s platforms.

Prepare for the new normal
Now is the time to examine whether you have the capabilities you need to fulfill your value proposition successfully. High performers connect to a wider ecosystem by channeling their capabilities in broader “market activities.” Even as industries and technologies change, these activities are likely to remain relevant.

Make your ecosystem successful
Think about how you can deliver ongoing value for your value proposition within your ecosystem, rather than just relying on it as a transaction-based partnership. Consider yourself as a key driver of your ecosystem development, independent of which role you are playing. Encourage existing and new ecosystem partners to participate.

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